If a Social Preference for Low Inflation Is Strong, Then

question 33

Multiple Choice

If a social preference for low inflation is strong, then the optimal policy response to oil shocks might be reducing ____ to keep the price level _____.

• A) AD, constant
• B) AD, increasing
• C) SRAS, constant
• D) SRAS, increasing
• E) none of the above

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Definitions:

Hemorrhage

An excessive or uncontrolled bleeding, either internally or externally, due to ruptured blood vessels.

Autopsy

A post-mortem examination of a body to determine the cause of death or the extent of disease.

Electrodes

Conductive materials that allow the flow of electric current in and out of devices, such as batteries or electrochemical cells.

Automated External Defibrillator (AED)

A portable electronic device that automatically diagnoses life-threatening cardiac arrhythmias and can treat them through defibrillation.